1) A new capital project requires a $1.000 decrease in inventories, a $2.500 increase in accounts receivables, and a $1.800 decrease in accounts payables. What is the net cash inflow or outflow in net working capital?

a) $3.300 outflow

b) $3.300 inflow

c) $1.700 outflow

d) $1.700 inflow

2) In a capital project, an old machine, which was purchased at a cost of $600.000 3 years ago and had a useful life of 5 years will be sold now at a price of $300.000. The company applies accelerated depreciation method. Tax rate is 40%. What is the disposal cash flow?

a) $276.000

b) $302.000

c) $266.420

d) $231.840

3) In a capital project, revenues are expected to increase by $120.000 and operating costs will decrease by $50.000 per year. The asset acquired has a cost of $500.000 and the company applies straight-line depreciation (20%) method. What will be the operating cash flows in each year? (Tax rate is 30%).

a) $79.000

b) $149.000

c) $89.000

d) $19.000

e) Other:

4) Assume that a company estimates $100,000 sales for the month of September and $120,000 sales for the month of October. The company predicts that 60% of the cash from these sales will be collected one month following the sale and the remaining part will be collected two months after the sale. The beginning cash balance for October is forecasted to be $10,000. Each month $40.000 of expense will be incurred. If the minimum cash requirement is $30.000, what would be the ending balance of cash in November?

a) $100.000

b) $102.000

c) $104.000

d) $106.000

e) Other:

5) Which one of the following statements is FALSE regarding operating leverage?

a) A company that has a high DOL has a high business risk.

b) DOL is a measure of sensitivity of a firm's EBIT to a change in sales.

c) The higher the DOL, the closer the company to its break-even point.

d) Operating leverage mainly focus on the use of variable operating costs by a company.

6) A company produces polyester only. Fixed costs are $10.000. Break-even sales amount of polyester is $120.000. Sales price is 10 $/kg. What is the unit contribution margin at the break-even point?

a) $0,63

b) $0,73

c) $0,83

d) $0,93

7) Suppose that a company that has 25.000 outstanding shares will require a new financing of $500.000 from 50% common stock issuance and 50% bond issuance. All common stocks are sold at $10 per share (25.000 shares) and all bonds have a coupon rate of 8%. Expected EBIT is $100.000. Income tax rate is 20%. What is the variability of EPS?

a) 1,25

b) 1,27

c) 1,23

d) 1,29

e) Other:

8) Suppose that the company in Question 6 and the company in Question 7 are the same firm. What would be the degree of total leverage?

a) 1,18

b) 1,28

c) 1,38

d) 1,48

e) Other: